Medicines and Medical Devices Bill

Debate between Lord Lansley and Baroness Jolly

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Thursday 14th January 2021 Lords Chamber

[Lord Lansley (Con) [V]]

My Lords, I am most grateful to the noble Lord, Lord Hunt of King’s Heath, for his amendment and for the way he introduced it. It very helpfully allows us, at this very important moment, to take stock of how we secure the availability of medicines—although the legislation does not relate to NICE, and I am sure it will not surprise the noble Lord, Lord Hunt, that I do not think it is appropriate for us to legislate to tell NICE how to do its work, given its independent statutory constitution. None the less, the Bill is about the availability of medicines, and it is really important for us to identify how the NICE processes can assist in ensuring that we get medicines to those who need them.

I shall say a few words about the NICE processes. First, let me address the objective, from my point of view. When I was Secretary of State, I advocated a process called “value-based pricing”, which was to try to understand that not only were there quantitative factors measured in quality-adjusted life years—QALYs —which, if one were able to secure them, gave one a quantitative basis for understanding the value of a new medicine, but that in addition there were other qualitative aspects, which I described as the societal benefits and the innovation benefits. I still think that this is the right approach.

In the international context, many countries are trying to escape the potential downward spiral of reference pricing, where everybody is trying to pay less than the average. The net result, if we carry on down that path and if the American Administration pursue that path, will be that we end up with inadequate support for the industry for the development of new and innovative medicines.

What we need to do is to value innovation and support the industry for the value it delivers. However, we do not measure it precisely in those terms. When we look at our current structure in this country, we need to understand that there is an opportunity created by what is known as VPAS—the voluntary pricing and access scheme. If it is genuinely the case, and we have argued that it should be, that the industry has accepted a constraint on the overall growth of the medicines budget in the NHS, and if it is clear that, if that growth is exceeded, there will be a rebate and that rebate does indeed return to benefit patients, through the NHS or the innovative medicines fund, so promoting access to new medicines, then we will arrive at the point where both NICE and NHS England should be working together to try to secure the best value from that drugs budget. I think they should be working together to ensure that, where there is a mandate for a new medicine, it is one which is supported by, not imposed upon, NHS England. That is increasingly where we should be aiming to arrive: at a combined thought.

What goes into value-based pricing matters enormously as well. The noble Lord, Lord Hunt, referred to some of the important aspects. First, it is about societal values. For example, if we can deliver a health gain among the parts of our population where health outcomes are poorest, then we should ascribe additional value to that health gain. A modifier for health inequalities is consistent, for example, with the statutory responsibilities of the NHS to seek to address and reduce health inequalities.

Unmet medical need makes a difference. Incremental effectiveness of medicines is important, but to have a medicine available for those who thought that there was no opportunity for treatment available to them from the NHS can make an enormous difference, and I think we should ascribe additional value to that. Medicines which deliver innovative benefits—for example, which have a whole new mode of action—can lead to subsequent treatments, and we should have a method of qualitatively understanding where those innovations, even if they may not have dramatic incremental benefits, none the less give us long-term potential. We should reflect that in the price that we are prepared to pay.

Indeed, as the noble Lord, Lord Hunt, said, we should not apply a discount rate to quality-adjusted life years that is directly comparable with the discount rates that are applied to revenues over time. I think people's time preference for quality-adjusted life years is not so dramatically higher for gain now as opposed to gain in the future; there is a much greater degree of equivalence between health gain now and health gain that people will derive in future. That would certainly assist in promoting medicines that slow the progression of disease and help us to manage longer-term morbidity in our older population, which would be immensely helpful.

There is a whole range of such matters and there are many more one could talk about, but it is really important to distinguish between NICE’s job in undertaking a health technology assessment, which I think should be moved from the purely quantitative to the qualitative. It should include, for example, relying not only on randomised control trial data but understanding observational data and the data we receive from the use of the innovative medicines fund to see how well medicines work and what benefits and outcomes they can deliver—sometimes in relatively small populations for rare diseases—understanding that in practice and incorporating it in its assessment.

We need to support NICE in delivering what is regarded internationally, I hope, as a gold standard of health technology assessment. We need to understand that that is separate and distinct from the business of what price the NHS should pay and on what basis the industry and we, as payers for new medicines, should agree, understanding that our objective must always be to ensure that safe, effective and high-quality medicines are available to the NHS and patients.

[Baroness Jolly (LD) [V]]

My Lords, these amendments relate to NHS access to medical devices, and Amendment 46 from the noble Baroness, Lady Finlay, would ensure early access for NHS patients to medical devices and allow monitoring of safety and efficacy in real-time use. This amendment is pre-empted rather by the Government’s amendment, which removes the concept of attractiveness.

Amendment 66 from the noble Lord, Lord Hunt of Kings Heath, would require NICE to ensure that its recommendations support the NHS in the ways outlined in subsection (1) of the proposed new clause. This includes ensuring access to new medicines and medical devices for patients with rare diseases. Those of us who have been involved in rare diseases will be all too well aware of the problems of access to appropriate treatments for so few patients.

The interesting thing about this debate is that two of the House’s big health thinkers have been speaking, and both the noble Lord, Lord Hunt of Kings Heath, and the noble Lord, Lord Lansley, have given us a really good big-picture look which takes us slightly above legislation.

The noble Lord, Lord Lansley, spoke of social and innovation benefits and the need to value innovation, but with innovation does not always come success: we may have to try again. He spoke about the innovative medicines fund and the necessity for NICE and NHS England to work together. When it is put like that, it sounds very straightforward: why is that not normally happening? He talked about the importance of value-based pricing and getting the best value from the drugs budget—which, after all, is finite. He also talked about the health technology assessment, which is of course qualitative, not quantitative. I valued the contribution of this debate on the fourth group of amendments, and I will read it again with great interest.

Medicines and Medical Devices Bill

Debate between Lord Lansley and Baroness Jolly

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Wednesday 28th October 2020 Grand Committee

[Lord Lansley (Con)]

I thank the noble Baroness, Lady Wheeler, and the noble Lord, Lord Clement-Jones, for tabling their amendments, which allow us to have a useful debate; we might not otherwise reach into what some implications of the use of these powers might be. I particularly thank them for the way in which the amendments were introduced, which set out clearly and fairly the context and facts with which we need to work.

I recognise that Amendment 23 is a probing amendment. I am sure that the noble Baroness knows that, if she actually wanted to remove the capacity for legislating to introduce hub and spoke models, Clause 2(1)(g) would have to go as well as paragraph (c) to make that effective, but I do not think she wants to do that; I do not either. We all want to express our support for the pharmacy sector. In my view, the Government’s proposals in the Bill will allow that support to be given additional expression; they seem a positive step to have taken.

As someone who was shielded earlier in the year, about the only place I ever visited in April and May was the local pharmacy—not that often, but the fact that it was there and working, and the way in which it worked, was immensely impressive. Over the years, I have had a great deal to do with the pharmacy industry. In some cases, I am not sure that it was altogether happy about that. The noble Lord, Lord Hunt of Kings Heath, may remember that I worked with the National Audit Office in about 2008, when I was shadow Secretary of State, to establish the extent to which the pharmacy sector benefited through the category M reimbursement system by hundreds of millions of pounds more than it was supposed to. Those large-scale additional funds that were going into the sector had to be clawed back, as happened in the early part of the decade that we have just gone through.

That led to considerable turbulence in pharmacy incomes and values. They were overinflated and the incomes were higher between about 2015 and 2018, and the considerable clawback had a negative impact. Most recently, it is telling that the value of pharmacies—and the price increase—has gone down. It is also interesting to read the commentaries that say that pharmacy in Scotland attracts greater value because the flow of resources into it there is regarded as more stable than in England.

That is a great pity, because we have reached a point where there should be more stability and funding for pharmacies, and I want to pick up a point made by the noble Lord, Lord Hunt of Kings Heath. He suggested that the Government consider turning the advance payment into not a loan but a grant. It is a large sum of money, so it is not as easy as that. However, whereas earlier this year the global fund for pharmacies was set at about £2.6 billion and was going to be retained at that level in cash terms over five years, we have to think hard about whether that is reasonable under the circumstances. There is a good case for recognising additional costs met by pharmacies this year, and potentially into next year, and for reimbursing them perhaps through a change to the establishment fee before it disappears, with a considerable sum to recognise that.

We must also recognise that pharmacies will need real-terms increases in their resources—much as other parts of the NHS-related system are seeing real-terms increases in resources—and not to stand still in cash terms. Over the next four years, that might be something like £130 million extra.

All the way through, we have never achieved as much as we should in terms of pharmacies delivering additional services, particularly clinical services. It is partly because clinical commissioning groups have never quite recognised the flexibility they have in budget terms to use pharmacies. The noble Lord, Lord Clement-Jones, referred, quite rightly, to medicines use reviews—which are being phased out—new medicine services, nicotine-replacement services, sexual health services, minor illness services and so on. A wide range of additional services can be provided by pharmacies. If they can do it, frankly, the GPs, as those at the heart of the clinical commissioning groups, will find that it benefits them directly in reduced demand on their surgeries, which is of course one of their principal stresses at the moment. I hope that the Government will think about all that.

In this context, with these powers in the Bill, the Government do not need to know whether a large number of independent pharmacies will take advantage of the hub and spoke model. It is entirely permissive; they can choose to do so or not. The fact that they cannot at the moment is a significant potential constraint on the ability of independent pharmacies to access the benefits of automation in their sector. I am absolutely clear that we ought to give them access to this potential benefit. I do not know how many would take advantage of it or to what extent the large company chains would make their hub and spoke model available to allow independent pharmacies to get the benefits of that automation. It seems to me that they should, because there are many parts of the country that they do not reach and where they are not in competition. It is perfectly reasonable for them to allow them to access to it, particularly in some of those more remote parts of the country where dispensing is more difficult.

Many of the concerns raised about this in the debate seem to come down to the separate question that I can remember debating on legislation 15 or more years ago about whether we retain the role of the responsible pharmacist. This does not change that. The responsible pharmacist will remain as is; I do not see any plan to change that part of the pharmacy regulation. The change to hub and spoke seems potentially desirable.

While Amendment 29 does not need to be in the Bill, it makes a very good point, which is that there should be consultation and an agreed framework with the industry, and we should ensure that the framework is one that is seen to link resources and changes in the regulations, to enable it to compete more effectively. To that extent, I hope the Minister will take on board and support the intentions of Amendment 29.

[Baroness Jolly (LD) [V]]

My Lords, I thank noble Lords for their kind words and messages. I now have a tentative diagnosis and when I get my medication I hope to be functioning at 100% soon.

These amendments are on hub and spoke dispensing, where a hub pharmacy dispenses medicines on a large scale, often by making use of automation, preparing and assembling the medicines for regular spoke pharmacies that supply the medicines to the patient. My noble friend Lord Clement-Jones has given a detailed account of how hub and spoke works.

When the five-year funding contract for pharmacy in England was announced, the Government also pledged to change legislation so that independent pharmacies could operate this hub and spoke dispensing model. My noble friend tabled Amendment 29, which would ensure that the Government consult stakeholders on how hub and spoke is used and agree a framework with the support of the relevant sectors. This will ensure that the expected savings and efficiencies, and new healthcare services via pharmacies, can be delivered.